Tuesday, June 17, 2014

New Position: AAPL

When those MINI options were first issued, I looked at trying to set up a position in GOOG or AAPL, but I just found the process too tedious for a 10-share trade.  Now that AAPL has completed a 7-for-1 split, I bought a 100-share lot and sold a covered call.  If GOOG ever splits, I may jump in there on that one too!

My first AAPL covered call last week was a two-day trade for a weekly $93.93 strike.  That one expired unexercised, so this week I have rolled out to a traditional July monthly at a $95 strike – I’ll keep rolling along as the situation permits.

Like FB, AAPL doesn’t fit all of my trading criteria: I usually trade on S&P 4- or 5-star rated shares in order to take advantage of their research, but AAPL is a 3-star rated stock, like FB.  Unlike FB, AAPL does pay a dividend with the next ex-date in August, so it has that going for it.  AAPL has its lovers and haters, I’m happy to be on the bandwagon for this fine company for however long that makes sense.

Here are the details on my AAPL trade, net of fees and commissions. 



Bought 100 shares at average share price $93.81 (total $9,380.99).
Current covered call is a $95 July 2014; I will roll monthly as long as I hold the shares.

Net Profit:

1) Options Income:  = $143.48
2) Dividend Income: No dividend forecast until August
3) Capital Appreciation if assigned at $95.00:  $101.01

Total Net Profit if assigned and dividend collected:  $244.49
Absolute Return on Investment: ($244.49/$9,380.99) = 2.61%
Annualized Return if Assigned (32 days):  2.61%*(365/32) = 29.73%

No comments:

Post a Comment